Impact of Transport Infrastructure on Economic Growth of Pakistan

Abstract

Infrastructure is the fundamental factor of economic growth and enhancing a nation’s quality of life. Among various infrastructure elements, road transportation stands out as a significant driver of economic progress due to its productive influence and dynamic characteristics. This study examines the transport infrastructure of Pakistan to understand its influence on economic growth and environmental quality. To this end, the study utilizes time series data covering from 1980 to 2021. To empirical evaluate the existence of long run relationship between transport infrastructure and economic growth, the analysis employs both Auto-Regressive Distributive Lag method (ARDL) and Non-Linear Auto-Regressive Distribution method (NARDL). The results from both models indicate a positive and significant long-run and short-run relationship between infrastructure and economic progress. However, the study reveals a negative impact of carbon emissions (environmental contamination) on economic growth in both models. Based on these findings, the study suggests that expanding transportation infrastructure can lead to economic advancements but at the cost of worsening environmental quality through increasing level of CO2 emissions. Consequently, the study recommends that the government should prioritize carbon reduction projects and direct investments towards cleaner energy resources in the region.